SoftBank’s Masayoshi Son predicts 15 of the companies in its $100 billion Vision Fund will go bankrupt

Image
SoftBank CEO Masayoshi Son Alessandro Di Ciommo/NurPhoto via Getty Images
  • SoftBank founder and CEO Masayoshi Son predicts that 15 of the companies that the SoftBank Vision Fund has backed will go bankrupt.
  • In a new interview with Forbes, Son said that the fund has become more careful with cash installments after investing over $US10 billion in WeWork that seems unlikely to pay off.
  • In addition to WeWork, the Vision Fund has backed dozens of startups including ByteDance, Uber, Doordash, and Slack.
  • The market’s downturn amid coronavirus has caused SoftBank’s valuation to plunge, and the company is now prioritising share buybacks and bets on clear winners.
  • Visit Business Insider’s homepage for more stories.

SoftBank founder Masayoshi Son’s $US100 billion Vision Fund is becoming less generous with cash handouts to the companies in its portfolio – and Son now predicts that 15 of those companies will go bankrupt.

Son said in a new interview with Forbes that, in the wake of WeWork’s failed IPO last Fall and a plummeting market value amid coronavirus, the SoftBank Vision Fund will withhold cash infusions to save its foundering bets and instead focus on companies that seem likely to break out.

“I would say 15 of them will go bankrupt,” Son predicted, adding that he expects at least another 15 of the company’s 88 bets to succeed.

It’s part of Son’s plan for SoftBank to return $US150 billion in order to pay back its limited partners while remaining profitable. Its Vision Fund has a reputation for making huge investments in companies with high growth and high spending, like WeWork, Uber, and Doordash, but its market value has slid in the past month as coronavirus makes profitability seem increasingly out of reach for many startups.

SoftBank already backed away from its plan to buy $US3 billion worth of WeWork shares last week, alleging that WeWork failed to meet its conditions as it faces civil and criminal investigations into the company. Almost $US1 billion of that deal would have gone to WeWork ex-CEO Adam Neumann.

Son, who lost billions when the dot-com bubble popped 20 years ago, is now working to convince SoftBank’s investors that the fund can weather a potential recession spurred by the coronavirus epidemic.

“In the beginning of the internet, I was criticised the same way,” he told Forbes. “Tactically, I’ve made regrets … but strategically, I am unchanged. Vision-wise? Unchanged.”

Read Son’s full interview with Forbes here.